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Ad Retargeting Increases Conversion Rates

Ad retargeting is how businesses turn online window shoppers—people who are just browsing through products—into buyers.  Only about 2% of online shoppers purchase a product the first time they visit a website.  The other 98% of customers have to be brought back to the website after they have walked away without purchasing.

Ad retargeting is the way that businesses bring window shoppers back to their websites, and convert those browsers and non-sales clicks into sales and revenue.  The rate at which customers are converted from casual browsers to buyers is referred to as that website’s “conversion rate.”

What Ad Retargeting Is

Ad retargeting is a time-tested method for converting clicks into sales, but many business owners may not know the specifics of what ad retargeting is and how it works.  Ad retargeting works by keeping track of the customers that visit a specific website and then displaying ads for your website to them as they continue to browse the internet.

Ad retargeting works in a simple three steps: first, a customer visits a website.  Next, the customer learns about a product on the website, but leaves without purchasing the product.  Finally, the customer is “targeted” when ads for the product and website appear to the customer when they visit other websites, which keeps the product that they just learned about fresh on their mind, and reminds them to return to that website to purchase the product later.

How You Can Use Ad Retargeting

Setting up ad retargeting on your website is actually fairly simple.  All that is necessary is placing a JavaScript tag at the bottom of a page in your site.  This code is not apparent to customers, and does not change the performance of your website.

This code then tracks all of the visitors that visit your site.  The code does this by utilizing “cookies.”  When a consumer visits your website, anonymous retargeting cookies are then placed in their browser that allow you to track where that consumer is.

Ad retargeting companies, such as AdRoll, then use this list of visitors and their information from the JavaScript tracking link to retarget them and advertise your business as those customers browse the internet.

It’s a good idea to work with an ad retargeting company that works with the largest ad exchanges, since that will allow the company to advertise to web users on a wider variety of websites that they may visit after visiting yours.

Why Ad Retargeting Works So Well

Ad retargeting is so effective in converting “window shoppers” into purchasers, and thus increasing sales and revenue, because customers more often trust and buy from brands that they are more familiar with.  This familiarity is built up the more they see advertisements beside websites that they view.

Every time a customer sees an advertisement for your company, your company gains familiarity, and therefore, gains traction.  Ad retargeting keeps your product front and center so that when that customer is ready to buy that particular product, they go to your website and not someone else’s.

How to Make it Work Even Better

Ad retargeting is already a worthwhile practice to incorporate into your advertising strategy, but there are ways to optimize the standard ad retargeting process for your company to make it work even better for you and your website in increasing revenue by converting clicks into sales.  Ad retargeting can be optimized by segmenting your visitors.

This means that you divide the customers who visited your site based on what they viewed on your site.  For example, if your website sells kitchen appliances, visitors to your website will be sectioned according to whether they viewed hand-held appliances or countertop appliances.  Then, when those customers leave your site, they are advertised the correct type of product.

The most successful ad retargeting programs also advertises to customers based on their actions.  For example, an intelligent ad retargeting program may not advertise to people who visited your website and did actually make a purchase.

However, if a customer viewed countertop appliances and made a purchase, but also visited pages for hand-held appliances, an efficient ad retargeting program would be able to determine that the ads shown to that customer when they leave your site should be for hand-held appliances, and not for countertop appliances, since they are likely considering purchasing another appliance from your website, based on their actions within the site.

Customers shopping for different products must also be advertised to within different time-windows.  For example, customers who visit your site in search of Christmas cookie cutters should not be advertised other Christmas products after Christmas is over.

However, a great ad retargeting program would be able to make use of this information to determine that that particular customer may want to purchase seasonal cookie cutters in the future, such as for Easter.

A Piece of a Bigger Strategy

Ad retargeting is a great tool for increasing visits to your website and converting those visits into sales and increased revenue, but ad retargeting is best when used as part of a large digital strategy.  Ad retargeting can be used, for example, in addition to inbound and outbound marketing or demand generation.

Conclusion

Ad retargeting works best in conjunction with programs that drive consumers to visit your website in the first place, because ad retargeting itself does not serve that purpose.  Ad retargeting also adds value to marketing strategies that bring customers to your website for the first time because those strategies do not server the purpose that ad retargeting does: converting views to sales.

In other words, your website needs one piece of the strategy that brings the customers in, and one piece that essentially follows customers after they have left without making a purchase, and convinces them to buy.  These two factors work well alone, but their true value is realized when they are combined in a fully optimized online marketing strategy.

When you’ve decided to commit to an ad retargeting campaign, it is important to shop around for the best ad retargeting platform.  While it may seem like they all perform the same job, there are some differences that may make one or the other better for your company.

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About Sean Donahoe

Sean is one of the most recognized industry leaders in business and marketing. As a popular speaker, author, consultant he has helped over 50,000 students world wide find success in their businesses and has consulted with Fortune 500 companies and businesses of every size grow and thrive...

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